Script ideas for the below roleplay

Background: Jerry's Hardware's policy and procedure for inventory management calls for

Section 5.6.13 investment in inventory be kept at a level that ensures there is sufficient inventory to cover expected sales, and

Section 5.6.14 investment of funds in inventory as low a level as possible.

Your manager is concerned that the current policy and procedure is not allowing Jerry's Hardware to achieve the most efficient and effective level of investment in inventory.Your manager feels that the current policy and procedure, in particular section 5.6.13, is a barrier to achieving the best level of investment in inventory and asked you to prepare the ad hoc report in Task 3.Your manager has read the report and is now ready to discuss it with you and then move to the implementation of some improvements in inventory management.

Required discussion in role play:

Refer to the report you prepared in task 3 and discuss the current inventory policy and procedure and some changes that could be made to improve the investment levels in inventory. The meeting should cover these points:

• Limitations of the current policy
• Improvements that could be made
• Agreement on a course of action

Ad Hoc Report: Relationship between Sales and Inventory levels - Jerrys Hardware Date: 31.05.2019 Author: Angela Douglas Distribution List: Chief Financial Officer Purpose of the report: Is to show the relationship between sales and inventory and to show how important it is to maintain proper inventory levels. Comparing monthly sales figures to average stock levels. Analysis: (include chart developed in part ii above) Jerry's Hardware Pty Ltd Sales & Inventory Levels Analysis 140,000 120,000 100,000 80,000 $ Amount 60,000 40,000 20,000 Oct Nov Dec Jan Feb Mar Months -Sales ($] -Inventory ($) On average over this six-month period the inventory value is 17% of the actual sales. This is 8% short of the company policy. It is important to maintain enough stock to meet sales demand, the purpose of stock control is to reduce the cost of holding stock, while ensuring you can meet customers demands. The business should always have a safe amount of stock so that they are able to react and cover any unforeseen issues. Holding too much inventory ultimately affects the cash flow of the business, especially when the inventory is sitting in storage. Conclusion: From the graph is shows that we require better management of inventory. Based on the above observations it can be concluded that the inventory should be increased by approximately 10% to avoid lost sales. However, adding this additional inventory to comply with company policy uses excess capital without being available for other needs